QuadrigaCX filing protection from creditors. QuadrigaCX, a Canadian crypto exchange, is filing in order to avoid bankruptcy.
QuadrigaCX issued a statement on its website announcing that they had filed “an application for creditor protection in accordance with the Companies’ Creditors Arrangement Act,” as a part to move towards addressing its financial issues.
QuadrigaCX asked the Nova Scotia Supreme Court to appoint Ernst & Young to act as an independent third party to oversee its proceedings.
The act, according to another accounting firm PwC, this allows “financially troubled” companies a chance to restructure their affairs. Filing an application is generally done to try to avoid bankruptcy under Canadian law, as well as providing a path for creditors to receive a form of payment.
QuadrigaCX’s filing details were not available. Their statement continued:
“For the past weeks, we have worked extensively to address our liquidity issues, which include attempting to locate and secure our very significant cryptocurrency reserves held in cold wallets, and that are required to satisfy customer cryptocurrency balances on deposit, as well as sourcing a financial institution to accept the bank drafts that are to be transferred to us.”
“Unfortunately, these efforts have not been successful,” it continued.
QuadrigaCX plans to release further information after its hearing, which they’re hoping will happen on Feb 5th.
Customers have been complaining about withdrawal problems with both fiat and cryptocurrencies that they’re having with the platform. The exchange’s problems with fiat withdrawals have stemmed, partly, with the now-finished legal battle between them and the Canadian Imperial Bank of Commerce, which froze much of QuadrigaCX’s funds last year.
The Court ultimately ruled that QuadrigaCX should get the funds back, minus a portion, but its payment processor, Billerfy, said that it could not find a banking partner to endorse the drafts – this translates to meaning that they’re not able to send any fiat currencies to the exchange, therefore, the exchange cannot process withdrawals.
Interim QuadrigaCX CEO Aaron Matthews said that the exchange was hoping to process customer withdrawals “within the next two weeks” from an email that was sent out to its customers earlier this month.
This is a developing story, and there is now a Reddit Page about this incident.
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